One of the most interesting things about the Hertz bankruptcy has been the fate of their fleet of approximately 500,000 vehicles.
There have been fears the company would sell off hundreds of thousands of vehicles to pay their debts and this would send used car prices plummeting. While that would be good news for buyers, it would be terrible for people looking to sell their car.
Those fears appear to have been warranted as a fire sale now appears imminent. In a filing with the U.S. Securities and Exchange Commission, Hertz revealed they reached an agreement with creditors to “dispose of at least 182,521 lease vehicles between June 1, 2020 and December 31, 2020.”
Also Read: Hertz Files For Bankruptcy, Raises Fears It May Flood Market With Hundreds Of Thousands Of Used Cars
The proceeds will be used to pay Hertz’s debt and the filing notes the company will “pay in cash a total of $650 (£508 / €558) million of rent in equal monthly installments from July to December.” The money will also be used to make additional principal payments on financed vehicles.
Putting aside the boring the financial stuff, it appears the used car market will soon be flooded with nearly 200,000 vehicles. That means buyers might be able to score a late model used car for a fraction of what they would typically cost.
Of course, used rental cars were already a bargain as they cost 5-15% less than what used car dealers charge. The discount varies by model, but a recent study showed Hertz vehicles are typically priced 8.0% below market value for an average savings of $1,389.
That same study showed the best bargains were on the BMW 7-Series, Chevrolet Trax and Mercedes A-Class. Customers can also score big discounts on the Infiniti QX50 and Toyota Tundra.
H/T to The Detroit Bureau
